Banking Chinese Business Opportunities

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Banking Chinese Business Opportunities

China Securities Regulatory Commission (CSRC) are compelling companies to give out dividends to shareholders. This first important step is aimed at encouraging potential investors – China so far has yet to develop a wide range of investment options. The CSRC hopes by pushing dividends it will improve general  confidence, which is vital if China wants to establish a more mature equity market. See Sina.com.

Many foreign banks have already started to come to China, with hopes of doing business in China with Chinese investors and savers. However for the moment, investment options for Mainland Chinese remain limited and overseas banks are on the receiving end of strict polices and scrutiny.

There is also a growing trend of Chinese banks expanding overseas, especially into Europe and North America. This trend mirrors that of foreign banks hoping for more banking – business opportunities in China. Banks such as “China Construction Bank” (CCB)have held training sessions on their campuses in Northern China in recent years, with the view of grooming potential middle/upper middle managers for oversea posts. Chinese banks and China are slowly evolving and opening up to the world. You can read more on this topic at “The Globe and Mail”.

Cyber Attacks Affect Both Chinese Business And The USA’s

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Cyber Attacks Affect Both Chinese Business and the USA’s

In a turn of events China and the USA are to cooperate more on cyber threats. In his recent visit General Liang a seasoned veteran, talked with the Pentagon on the top of issue of cyber attacks. Both sides have acknowledged it is a vital area of cooperation. A key point made at the meeting was, that not all attacks hail from just one nation.

Whatever the motivation might be, political or economic, there’s no doubt that businesses have suffered. In many cases of a sustained attack a small or medium sized business have to change their hosting company – because they are themselves at risk. This in the very least equates to loss of time, manpower and loss of resources – all of which could potentially cripple a smaller business. Where such attacks originate from anyone could speculate, but it’s for sure there are many possible culprits both domestically and internationally.

More communication on this issue is needed, and can only help to raise levels of trust and help promote confidence. One area of particular importance is that of “intellectual property”, hopefully steps will be taken to safeguard this, both for companies doing in business in China and the USA. Read more on this – Cleveland.com

1.3 Billion Reasons To Do Business In China – For The Car Industry

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1.3 billion reasons why doing business in China is good for the Car industry

Progress is a wonderful thing, isn’t it? As China develops, ownership of all things seen as desirable are on the rise. I have mentioned this before in other posts – China’s car ownership is rocketing. China’s humungous population only has an estimated car ownership rate of about 3%, compared to that of 80% in the USA – see BBC. So it should not come to anyone as a big shock that China, along with India are seen as the next big markets for production and sales. Car sales have increased by as much as 2.5%. At the same time competition domestically for doing business in China, is turning fierce as local car brands strive for quality and performance.

This phenomena is not exclusive to any one brand – Audi which is viewed as a luxury car, has seen its sales shoot past its competitors. It posted a 8.5% increase – while other brands namely Volkswagen, Daimler and BMW have had more modest gains ranging from 2-2.5%. See the full story from the WSJ.

With all these gains being reported, I wasn’t surprised to read that Volkswagen are investing more capital into China, and have ear marked Chengdu for a new factory. An interesting observation – whenever there’s a local car factory the local consumer often buys in favor of that particular brand. For example if you go to Wuhan, in Hunan province there’s an overwhelming number of Citroen cars and it’s a similar story in other cities. So with this in mind it would be fair to assume Volkswagen numbers will rise to an enviable rate of ownership in Chengdu, that is to say when production is up and running. Volkswagen will be looking more nationally than just Chengdu for sales gains, and for their increased Chinese business market share. Although it’s not so cut and dry, because Chengdu does already have one of the highest rates of car ownership in the country – so it would be a strategic location for Volkswagen to leave their mark. See Couriermail.

This leads us nicely onto the next point, what about the green car? Well don’t worry because China is getting some of that too. Honda is one of the leaders in Hybrid Technologies and it’s seen China’s appetite for greener cars grow. As fuel prices increase the “regular guy” on the street looks for something more economical – I honestly don’t believe the “regular guy” on the street cares about “green” or not. China is a nation of savers more than spenders. This is especially the case for lower earners, for them saving cost is not necessarily connected to any high flung notion of saving the environment – unless it leads to more money in their pockets. But I’m hoping that more economical, hopefully means greener, and I really hope this translates into something tangible, because at 3% car ownership China has a long way to go. There’s always the other side too, and even though the higher earners still feel the pinch of rising oil prices, they still crave those guzzling status cars. The reasons to do business in China for Honda are multiple, but right now they are simply looking for a bigger chunk of the cleaner car sector. Honda now has plans to work with local partners. Read on…

I can hear some of you moaning about this not being progress, and you may question the implications on the environment. Well interestingly – China’s electric vehicle ownership is at admirable levels, when compared to other parts of the world. It’s worth noting that there are many more electric bikes and small cart like e-cars on the road in China than actual cars, although this might not be as noticeable in larger cities like Shanghai. If you were to look at smaller cities on the other hand, or cities further away from the rich coastal areas that attract most of the Chinese business as well as foreign, you would agree. The users of these e-vehicles range from police, taxis, disabled drivers (who often double as taxis) to the low income earners. The latter by the way, make up the majority of China’s bustling population. Some Chinese leaders believe that pollution will be one of China’s biggest socio-economic obstacles in the near future, and after being here for 8 years or more I would have to agree. View the full story at Earth Times.

That’s great? Not necessarily. Electric vehicles need… that’s right “electric” – so the question is, how is it produced and where does it come from? The Daily Mail examines this in their article on “Proof electric cars DO cause more pollution than normal ones: Study shows impact is worse than petrol-powered vehicles”.

Even though China’s consumption levels (how much they spend) are markedly lower on average than Europe and North America, they still have tremendous buying power due to its population size. There’s one thing that is certain, when a person sees their neighbor get richer, or buying cool things (Iphones, Ipads are the perfect example), that same person will try to get it too. What will or even what are already the implications for the environment? Only time will tell. Whatever the implications might be, business opportunities in China are still increasing, and the economy looks to continue its growth for the foreseeable future. There are also sure to be further negative impacts on the environment, unless greater steps are taken. For more on this please read the full story.

What’s The Real Value Of Doing Business With China – Has The Yuan Corrected Itself?

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Has the Yuan’s value changed?

Has the Yuan finally reached its real value? There has been a lot of heated discourse over the last few years mainly from the USA – on the value of the Yuan. Washington has openly accused China of tampering with its international business and trade with over countries on this basis – see China Post. Have things finally changed? Will the cost of import products from China be viewed more favorably in Washington?

In fact this very topic was to be on top of the agenda before the fiasco with blind activist hit the headlines over the last week. I still can’t believe that actions of one guy could derail a working relationship between the USA and China. When did the USA forget “the needs of many out weigh the needs of the few”. I would hate to think there would be negative business repercussions from a guy that’s not even an American. What do you think?

Okay my mini rant is done, back to the story. So what’s really happening with the Yuan just now? How about the trade surplus, is the USA and other countries gaining ground? The Economist follows the debate in its article “fair play or foul”.

As always your comments are welcome.

China And Taiwan – A New Era of Business

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Doing business with China – Taiwanese economy looks to be in good shape

Now that Taiwan has addressed the elephant in the room, and got this independence nonsense largely out of the way, they can get back to doing business with China and focus on improving relations across the Taiwanese straights. Which is a good move for all, it will save the West getting dragged into another potentially stupid war.

It’s in Taiwan’s best interest to cozy up with China and as China’s cup over flows, the advantages of doing business with China are being felt in Taiwan. In particular 10 stocks have been ear marked as the ones to watch out for by Economic Daily News today. President Ma Ying Jeou’s recent win on the big island has proven to been a huge boost for the economy, and a catalyst to the warming up of business relations. Additionally the Taiwanese economy has benefited directly from Mainland investment. Since the signing of the Economic Cooperation Framework on June 29, 2010 – Taiwan has had $139 million injected into its economy – according to the “Library of Congress”. To read more on this article follow the link here.

As always your comments are welcome.

Business Opportunities In China – IMF Fairly Optimistic On Chinese Economy

 

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IMF optimistic on China

Is the China economy sick or still bubbling along happily? Why do business with China when most of the media seems to bashing China’s economy? Well the media as we know is bias, and to some extent me too.. because I’m generally optimistic on the Chinese economy for near future. Pundits often announce China will experience a “hard” or “soft landing”, it could do but not yet and the IMF backs me up on this one. A report by the Economist suggest that even though there is a slow down, China’s economy is still growing at a healthy rate when compared to over nations. See full story.

Foxconn Feels The Risks Of Doing Business In China – But Reaps The Rewards

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Foxconn workers – hasn’t always been a smooth relationship

Foxconn is the worlds biggest manufacturing company – it’s most famous partner is of course Apple for whom it produces the iPhone and iPads. Just mentioning Apple however doesn’t quite do the company justice, some of its other partners also include Dell and Amazon.

Foxconn is a “poster boy” for successful Taiwanese and Chinese business cooperation, but unluckily for them it’s been in the news over the last year or so for the wrong reasons. Unlike the happy bunch in the photo above – not everyone loves Foxconn, just Google it. Foxconn rightly or wrongly has become synonymous with everything from factory suicides, poor accident compensation, to below par working conditions. Recently in their defense they’ve made a deal with Apple to improve salaries and conditions. Of course most big corps don’t always demonstrate their social responsibility until they get a public bashing and much of their impetus was from just that. A lot of the domestic pressure came from the all important Chinese public, who have a terminal love/lust relationship with anything Apple. But in all fairness the Chinese government is extremely also adamant on improving the working conditions for factory workers ( or “migrant workers”). Technically China has about 800 million people who don’t live in tier one cities and many of that number migrate to work in wealthier areas – often to work in factories.

It does seem that Foxconn – which is a Taiwanese company by the way, is doing something right as they began work Thursday on a new HQ in Shanghai. This does come at an interesting time when there’s a lot speculation aimed at the Chinese economy, which although slowing has signs of continuing growth. Regardless of the reality, when astute companies like Foxconn are conducting business in China and choose to invest further tens of millions into a new HQ – it does send an optimistic message on China. For more on information please see the full story.

International Business With China Is Slowing – But Still Growing

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China’s Economy – based on exports

Mixed results for April, China’s trade surplus slows but still shows some signs of growth. What are the causes and the impacts for the rest of the world? How will this affect the Europe Union – China’s biggest trade partner and will there be a knock on effect for North America? I welcome your comments – see Boston.com for more.

Foreign Investment – Reasons For Doing Business in China

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Foreign investment in China – reasons for doing business in China

China represents massive market potential for a whole range products and services. Starbucks is one of the biggest names when it comes to coffee almost anywhere in the world. The staggering success of Starbucks here in China is already legendary and should be the template on how to make business in China work. Its success is due to several important factors, but none more important than the outstanding execution of its business model. Another factor in the continuous success of Starbucks would have to be the continual tweaks and adjustments of its products in view of local tastes and requirements – for example its “green tea frappuccino” that I believe is only available in Asia. 

There are still great opportunities here, although it would be virtually impossible for any single coffee shop brand to rival “you know who”. The next wave of successful businesses may yet come from services or products that many businesses and individuals take for granted. Take leasing for example, small companies to huge multinationals they all lease in one shape or form in the USA. Not only that, but it’s a multi-billion dollar industry, and still overlooked here in China by overseas leasing firms. The key might be to choose an industry that’s not a completely new concept, but at the same time a sector of low competitiveness. Of course it’s not as simple as I am making out, because certain industry sectors have extremely robust and competent foes. In addition government policies might also favor local competition in some circumstances. The benefits of doing business in China in my opinion out way the risks, and it’s something that I deal with in my up and coming e-book “Doing Business In China”. 

Insurance is another industry that up until now has been relatively under developed, when compared to Europe for example. This is starting to change however as foreign insurance companies now agree that China is the next big market. China Daily explores this new trend in their article.


Premier Takes Care Of Chinese Business – In Iceland

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Wen Jiabao, Chinese Premier – visits Iceland with Chinese business Interests in my mind

It may or may not surprise you that the USA is the second biggest oil producer in the world. What maybe more surprising however is that China is just behind Russia at number 4 – according to a CNBC report. It’s also fairly well understood that the USA is the biggest consumer of oil, followed closely with China in 3rdplace. (CIA – The World Factbook).

So how far are nations willing to go to secure more resources? Global warming is peeling back icy frontiers – which in turn has led to Denmark, Norway, Canada and Russia all laying claims to the energy rich continent. Environmentally much the same melting of glaciers is happening in Iceland, and it’s making the previously inaccessible – accessible. But what has this got to do with China? During the 2008 financial crisis Iceland was one of the hardest hit European countries and has struggled to get back on it’s feet ever since. Now it seems they maybe looking beyond Europe for their economic assurances. Wen Jiabao, the Chinese Premier plans to start his northern European tour with a visit to the not so icy Iceland. There’s a lot of speculation over Iceland’s resources and it seems that China’s early advances are welcome as it considers very seriously the advantages of doing business with China – Read The Calgary Herald.